Plasson

January 25, 2015

PLasson

Plasson manufactures pipe couplings. Unidelta launched a competing product and Plasson claimed patent infringement of their patents IL 125899 and IL 127327 and passing off and requested an injunction. The District Court accepted the charges that the “main point of the patent” was infringed and issued an injunction preventing the manufacture, import or sale of Unidelta’s pipe connections in Israel as they are a copy of Plasson’s product. On Appeal, the Supreme Court overturned the finding of patent infringement and referred the case back to the District Court. The Supreme Court ruled that where the similarities between the allegedly infringing product and the patented invention lie in features that are in the public domain, there can be no case of infringement.

Background

In addition to literal infringement of the claims of a patent, Section 49 provides grounds for legal remedies where the kernel of the patent is copied. This is rather like the “pith and marrow” doctrine in the UK. Essentially, the Law provides remedies where claim infringement is avoided by a technicality, and may be seen as similar to the doctrine of equivalents. Arguably contributory infringement and inducement to infringe may be considered as judicial extensions of this doctrine. It is important to allow general inventing around, but to avoid situations where poor claim drafting can result in no literal infringement of the claims.  What the Supreme Court has done is to clarify the extent of application of Section 49.

Ruling

Judge Meltzer of the Israel Supreme Court ruled that Section 49 provides monopolistic powers to the patentee to prevent literal infringement of the claims defining the invention and also similar products / processes that infringe the kernel of the invention. In this instance, both parties accept that there is no literal infringement so the only issue is the kernel of the patent. The kernel cannot be wider than that described in the Specification and, where the patent is for a device or system comprising a combination of known parts, the kernel of the patent cannot include the parts themselves. In this instance, the District Court did not address the question of what the kernel of the patent is, and without identifying the kernel of the patent, it is impossible to establish that this is infringed by Unidelta’s product. Once the kernel is established, the court must consider whether the infringing product operates in a similar way to achieve similar results.

The Supreme Court ruled that the patent issued because of a limiting feature added to the other components.

The main claim recites:

“1. A pipe coupling comprising a tubular housing having an axial bore adapted to receive a pipe end to be coupled and having an externally threaded housing portion and an inner housing abutment; a pipe gripping sleeve having formed therein a plurality of substantially equiangularly distributed, axially directed slits extending from a first end thereof to a region adjacent to but spaced from a second and opposite end thereof thereby defining an integrally formed, axially distortable, ring-like sleeve end portion, a first axial portion of said sleeve, through which said slits extend, tapering externally from a peripheral, outwardly directed flanged portion towards said first end and being formed with a plurality of inwardly directed, axially spaced apart serrations; a tubular collar having a first inner axial portion tapering from an inner collar abutment to a first end of said collar and a second inner axial threaded portion extending from said collar abutment to a second and opposite end of said collar; and a flexible sealing ring; the arrangment of said coupling being such that with said pipe end extending through said collar, sleeve, sealing ring and housing, said collar is screw fitted on said housing, said sleeve is located in said housing and said collar with said flanged portion located between said collar abutment and an adjacent end of said housing and said sealing ring is located between said sleeve ring and said housing abutment; screw tightening of said collar on said housing causes the respective tapering portions of the collar and sleeve to be mutually displaced with the gripping contraction of said sleeve about said pipe end and the axial compression of said sealing ring about said pipe end”.

Plasson’s patent is for a ring fitting that includes a wide and flexible ring that enables different sized pipes to be attached together in one smooth motion without dismantling the connector. Since Unidelta’s system did not include this limiting feature, but merely combined pre-existing components to create an alternative pipe fitting, there was no infringement of the kernel of the patent.

Quoting from the specification:

Pipe couplings of the type herein described, which are presently in wide-spread use, normally require pushing the pipe through the seal (typically an O-ring) in the bore of the body member in order to achieve compression of the O-ring on the pipe, and thus a leak free joint. However, for pipes of large diameters, the operation of pushing the pipe through the O-ring seal requires a large force, making the operation very difficult, and sometimes even necessitating an extra operation of chamfering the pipe end for this purpose.

A further disadvantage in the pipe couplings of the type herein described now in use is that such couplings do not tolerate substantial variations in the pipe diameter so that precise pipe diameter tolerances must be maintained, or a large number of different-size couplings must be produced for the different diameter pipes to assure good sealing and gripping actions”.

“…a pipe coupling constructed in accordance with the foregoing features provides a number of important advantages including: convenient assembly, since the particular seal, in its relaxed condition, introduces very little resistance to the forceful entry of the pipe during assembly; …increased diameter range of pipes capable of being coupled, since the two-ribbed (or three-ribbed) sealing ring can accommodate substantial differences in diameter sizes…”.

This emphasizes that Plasson did not invent the only pipe coupling for joining pipes of different diameters, and there patent was limited to one that is easy to seal due to little resistance.

As to passing off, the Supreme Court was critical of the District Court for finding this without explanation of why they considered that this was applicable. The Supreme Court referred the case back to the District Court for further consideration on this issue.

Judge Meltzer established costs against Plasson of 75000 Shekels.

Judge Miriam Naor (now president of the Supreme Court) commended Judge Melzer on reducing the issue to non-technical matters without technalese that regular people could understand.

Appeal 6750/10 Unidelta vs. Palson, Supreme Court 18 December 2014

COMMENT

One wonders who the non-technical people are in this case, plumbers or the President of the Supreme Court? Is the technical issue here flanges and pipes, gaskets and washers, or non-literal infringement, pith & marrow and other legalese?


PCZL (Pearl Cohen Zedek Latzer LLP) Appeals Source Vagabond Decision Sanctioning the Law firm for bringing Frivolous Law Suit.

January 21, 2015

shlooker

Background

Source Vagabond is one of a number of companies making personal portable water supplies that are known in Israel as Shlookers – a shlook being slang Hebrew for a sip.

On August 2, 2011, Source Vagabond sued Hydrapak for, inter alia, infringing “at least claim of the US 7,648,276 patent, either literally, or under the doctrine of equivalents.” On September 16, 2011, Hydrapak served a sanctions motion under Rule 11 which provides that, before a motion for sanctions is filed, the party against whom the sanctions will be sought must be notified of the potential Rule 11 violation and given a twenty-one-day period to withdraw the offending claim. Fed. R. Civ. P. 11(c)(2). Source declined to withdraw. On October 6, 2011, Source filed an Amended Complaint, and on October 12, 2011, Hydrapak served an amended Rule 11 motion.

The court of first instance ruled that granted Hydrapak’s motions for summary judgment and Rule 11 sanctions on April 11, 2012.

Regarding claim construction, the court said there was “nothing complicated or technical” about the claim limitation “slot being narrower than the diameter of the rod,” and that none of the words of this limitation “requires definition or interpretation beyond its plain and ordinary meaning.” Accordingly, the court gave “slot being narrower than the diameter of the rod” its“plain and ordinary meaning.”

The district court stated that Source’s proposed claim interpretation “violates all the relevant canons of claim construction” and that even under Source’s own construction, Hydrapak did not infringe. It also found the literal infringement claim “lacked evidentiary support no matter how the claim was construed” and “the difference is apparent to the naked eye, and the tape measure leaves no room for doubt.”

Specifically, the district court determined that in Hydrapak’s products the slot is larger than the diameter of the rod, even under Source’s proposed construction. The original decision ruling that the case was frivolous and fining attorneys PCZL is reported here.

Source Vagabond and Pearl Cohen Zedek Latzer appealed the ruling.

The Appeal

On appeal, judge Cott determined that the sanctions were bases on two grounds:

“Source made frivolous legal claims in its submissions to the Court, in violation of Rule 11(b)(2); and Source failed to conduct an adequate investigation before filing this lawsuit, in violation of Rule 11(b)(3).”. He recommended Source’s counsel (i.e. Pearl Cohen Zedek Latzer pay $187,308.65 in partial attorney’s fees, but that Source not be sanctioned.

The logic, explained by the district court was “Given counsel’s sole responsibility, as a matter of law, for the violations of Rule 11(b)(2), and counsel’s additional responsibility for the failure to investigate under Rule 11(b)(3), I recommend that Yonay and Shuman be held responsible for any monetary sanction. I further recommend Yonay and Shuman’s law firm, Pearl Cohen Zedek Latzer LLP be held jointly and severally liable in accordance with Fed. R. Civ. P. 11(c)(1).

Hydropak successfully argued that it should receive legal fees for defending against te reconsideration motion, and the court concurred, raising the damages to $200,054.

The decision was appealed to the Court of Appeals of the Federal Circuit.

Court of Appeals of the Federal Circuit Ruling

In patent lawsuits, defending against baseless claims of infringement subjects the alleged infringer to undue costs, and this is precisely the scenario that Rule 11 contemplates.

The District Court found that Source had an obligation to demonstrate why they believed they had a reasonable chance of proving infringement, and that Source failed to show either literal infringement or infringement under the doctrine of equivalents. The issue revolved around the meaning of “slot being narrower than the diameter of the rod”. The district court dismissed Source’s construction stating, “an ‘analysis’ that adds words to the claim language [without support in the intrinsic evidence] in order to support a claim of infringement” does not follow “standard canons of claim construction.” Additionally, the surrounding claim language demonstrates that the “the slot,” “the rod, and “the portion of the container . . . folded over the rod” are distinct from each other. The claim language does not compare the size of the slot to the size of the rod together with the folded over container. Source had the ability to draft the claim that way but did not. It cannot correct that failure by adding words to otherwise unambiguous claim language. In other words, there is a limit to what one can argue a claim means.

Finally, Source argues that Hydrapak’s proposed construction “would render the entirety of claim 1 nonsensical.” This is a fascinating admission that not only does the scope of the claim as prosecuted by PCZL not include the product fabricated by Hydrapak, but that the claim is actually meaningless.

On Appeal, the Federal Circuit stated that “The district court properly determined that “claim construction is a function of the words of the claim not the ‘purpose’ of the invention,” and that Source’s construction “violates nearly every tenet of claim construction and amounts to a wholesale judicial rewriting of the claim.” Source was required to “perform an objective evaluation of the claim terms” to satisfy its obligation to conduct a reasonable pre-suit evaluation. Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1329 (Fed. Cir. 2011). By proposing a definition that ignores the canons of claim construction, Source did not meet that standard. The district court did not abuse its discretion in imposing Rule 11(b)(2) sanctions based upon Source’s frivolous claim construction arguments.

Regarding the doctrine of equivalents:

(“[N]either the attorney’s affidavit nor plaintiff’s ‘pre-suit analysis’ . . .[ever] mentioned, let alone analyzed, how Hydrapak’s product infringed Source’s patent under the doctrine of equivalents.”). Counsel was obligated to come forward with a showing of exactly why, prior to filing suit, they believed their claim of infringement under the doctrine of equivalents was reasonable. See View Eng’g, 208 F.3d at 986. Source did not comply with this requirement below. Under these circumstances, the district court did not abuse its discretion in finding a Rule 11 violation. The cost of $200,054 against Guy Yonay and against Pearl Cohen Zedek Latzer was affirmed.

Court of Appeals Federal Circuit, SOURCE VAGABOND SYSTEMS and Pearl Cohen Zedek Latzer LLP v. HYDRAPAK, INC., decided June 5, 2014

COMMENTS

I apologize to readers for being tardy in reporting this decision from June 2014. It has only recently come to my attention. Guy Yonay accused me of unfair reporting of the original decision and argued that the judge was clearly wrong, and Zev Pearl accused me of publishing lies. I think this decision, which may be found in full here appeal PCZL vindicates my reporting.

The court is correct that the attorneys are responsible for filing the frivolous law-suit. Why did this happen?

Well, the decision states that “Guy Yonay and Clyde Shuman are partners in the law firm Pearl Cohen Zedek Latzer LLP. Prior to the present action, Mr. Yonay prosecuted the ’276 patent application. In the underlying district court litigation, Mr. Yonay signed the original Complaint on behalf of Source, and Mr. Shuman signed the Amended Complaint.”

I would suggest that the first problem is that Yonay apparently prosecuted the claim before the patent office (and may have drafted the application) and then went on to litigate it. This is never good practice. Before litigating one should seek an independent opinion of the chances of prevailing. Yonay could not objectively review the claims he’d prosecuted. He appears to be confused between the purpose of the product and the claimed structure. With mechanical patents one cannot, by obtaining a patent for a specific device, prevent third parties from competing with devices having different structures that are well beyond the ambit of the claims, by arguing that they achieve the desired aim and are thus functional equivalents.

In general, it is ill-advised for the prosecutor of the patent to litigate it in court. Indeed, it is ill-advised for the prosecutor and litigator to belong to the same firm. At least on Appeal, Pearl Cohen took an external counsel, Jenks.

The managing partner of PCZL, Zev Pearl is not licensed to practice in the US. There is, however, a senior partner, Mark Cohen, who is US licensed. Both these gentlemen could and should have prevented the frivolous case being filed. Their failure to do so explains why the courts find the firm responsible and not just Yonay and Shuman.

In a newspaper article on trolls that originated in PCZL was published in the Jerusalem Post and also appears on the Pearl Cohen website, it is implied that only under new Obama legislation, can non-practicing entities be sued for costs in unsuccessful law suits. The implication is that prior to the proposed legislation trolls had nothing to lose by filing frivolous lawsuits and that practicing entities have nothing to lose as they are not trolls. This decision shows the error in this approach. Any entity, whether practicing or otherwise, must have reasonable grounds of validity and infringement to bring a case against a third-party to court. The courts have the authority to sanction the plaintiff and their legal counsel for filing frivolous cases. Pearl Cohen should have known that the interpretation they were giving to the claim was untenable. It was not infringed. The courts were therefore correct in fining PCZL.

 


Reviving Lapsed Patents in Israel

January 18, 2015

revival

The December crop of patent office decisions included a number of attempts to revive lapsed patents. The requirements for revival, broadly speaking, are that the patent lapsed unintentionally and that the patentee acted promptly to restore the lapsed patent. Three out of five requests for reinstatement were allowed. Two requests were refused due to tardiness in filing the request for revival.

IL 152965 to Shlomo Lavel unintentionally lapsed. Patentee claims to have paid the renewal fee on-line but could produce no evidence of this. He further claims to have made steps to commercialize the technology. When trying to pay the second renewal he discovered that the patent had lapsed. As Deputy Commissioner Ms Jacqueline Bracha was convinced that the patent lapsed unintentionally and that the patentee took steps to rectify the situation promptly on learning that the patent had lapsed, she has ruled that it may be revived and the decision will publish for opposition purposes.

IL 168588 to Sharine Polishing technologies LTD unintentionally lapsed. Patentee paid the renewal fee on-line but did not send the proof of payment to the patent office. Following a random check he discovered that the patent had lapsed. As Deputy Commissioner Ms Jacqueline Bracha was convinced that the patent lapsed unintentionally and that the patentee took steps to rectify the situation promptly on learning that the patent had lapsed, she has ruled that it may be revived and the decision will publish for opposition purposes.

IL 192499 to S. M. B. T. technologies issued on 25 June 2013. The first renewal should have been paid within three months, i.e. by 29 September 2013, and, when it was not paid within the subsequent six months, was deemed to have lapsed as of 29 September 2013. The current owners took possession on 3 September 2013 and responsibility was transferred to Zvi Ben Ari, Patent Attorney. Mr Ben Ari attempted to pay the next renewal on 3 June 2014 and learned that the patent had lapsed. He contacted the previous representatives for an explanation but was unsuccessful in this attempt. It seems that the patent was abandoned due to human error. The problem was that the request to reinstate was only submitted some four months later. In the circumstances, Deputy Commissioner Ms Jacqueline Bracha could not find that the patentee or his representative had acted promptly to reinstate as required by Section 60 of the Law, so reinstatement was not allowed. The patentee is entitled to a hearing under regulation 90.

IL 196017 to Microsoft lapsed due to failure to pay the second renewal which lapsed at the end of June 2013, and the fact that it had lapsed published in the February 2014 patent office journal. Microsoft filed for reinstatement, claiming that their foreign renewal service provider unintentionally noted the filing date as June 2008 instead of June 2007 and so docketed the renewal for 28 June 20014 instead of 28 June 2013. In April 2014 the local agents (Colb) were contacted and on 15 July 2014 they filed for revival with affidavits from the service provider. Although the reasons for the patent lapsing were explained, no explanation was provided for the nearly four months that passed before the reinstatement request was filed. In the circumstance, reinstatement was not allowed. The patentee is entitled to a hearing under regulation 90.


Israel Patent Application Number 142789 – The European Patent Wrapper

January 15, 2015

file wrapper

DSM IP Assets owns Israel Patent Application Number 142789.

PMS Armory Factory LTD opposed the patent issuing. The opposer wished to enter the file wrapper of the corresponding European patent application into the evidence, but the Adjudicator of IP, Ms Shoshani Caspi refused to allow this as the request was submitted late in the proceedings. The opposition was rejected on 17 October 2013 and the Opposer appealed to the District Court.

On 12 August 2014 Judge Shitzer ruled that the file-wrapper of corresponding patent application EP 1137828 should be admitted as evidence. See here. The Applicant appealed this to the Supreme Court who ruled that the case was ongoing and so they were not yet prepared to get involved.

The Applicant therefore requested an expedited decision by the Patent Office regarding EP 1137828 so that they would be able to benefit from the application before it finally lapsed in 4 1/2 years. The Opposer rejected this request, claiming that it gave the impression that they were time-wasting. They requested due process including the right to cross-examine the witness. Applicant argued that the file wrapper did not need to be submitted by a witness that would be available for cross-examination. The District Court merely ruled that the evidence was admissible. Submitting via a witness who would be cross-examinable was a mere time-wasting exercise.

The Opposer argued that the European file wrapper raised technical issues that required clarification, and the applicant argued that this was widening the grounds for opposition. The sides each tried to get the other’s case thrown out on technicalities and argued as to who should be cross-examined first to avoid giving one side an advantage over the other.

Ms Yaara Shoshani Caspi ruled that as the European file wrapper was ruled as admissible by the courts, its relevance should be determined and now was not the time to try to stop it being considered by a technicality. She went on to rule that the European file wrapper should be submitted with a statement of its relevance to why the claimed invention is not patentable and the applicant could respond to the statement. There was a need to finish the opposition without further ado to provide legal clarity to the sides and to third parties regarding the validity or otherwise of the patent.

The Opposer should submit the European file wrapper in full within 14 days with no moe than six sides of arguments and the applicant would have 14 days to respond. The opposer would then have 7 days to sum up in three sides. That would be the time to decide whether a witness should be available for cross-examination. Should there be a hearing the sides would be required to sum up orally, and a final ruling would issue soon after the summary / hearing. No costs were awarded at this time.

 


Double Patenting in Israel

January 15, 2015

novartis

The present ruling relates to the issue of identical of overlapping patents and patent applications, and examines the ramifications of double patenting.

IL 2039732 is a Divisional Application of IL 176831 “Compressed Pharmaceutical Tablets or Direct Compression Pharmaceutical Tablets Comprising DRR-IV Inhibitor Containing Particles and Processes for their Preparation”. Novartis have appealed a final Examiner’s rejection.

The Examiner considered that the parent and the divisional application are directed to the same invention. After this issue was first raised, the Applicant amended the claims, but the Examiner considered that the amended claim set (claims 1-23) covered the same invention as claims 23-26. Based on 5293/93 Welcome Foundation vs. Patent Commissioner (1993), the Examiner rejected the claims of the divisional application. A telephone conversation was to no avail. The Examiner issued a final rejection noting that there were substantive issues not addressed, whilst Applicant is appealing this decision claiming that the issue is one of interpretation of the law and has thus appealed to the commissioner.

The Commissioner held a hearing and allowed the Applicant to present a short summary of the comparative law in US, Europe, Australia, Japan, China and India. In this instance, the Examiner did not claim that the divisional had identical claims to the parent application, but that there was some overlap. According to the Commissioner, the issue is one of interpretation of Sections 2, 8 and 9 of the law. These state that an inventor is entitled to a patent, that a patent can only cover one invention and that where two or more applicants file for the same invention, the first to file is awarded the patent. The purpose of divisional applications is to prosecute additional inventions claimed within the same parent application.

In the Welcome case, claims 1-10 related to uses of a pharmaceutical preparation in the treatment of various diseases and claim 15 related to a method of preparation of the active ingredient.  Then Commissioner, the late Michael Ophir ruled a claim for use in preparing a medicament’ and ‘use in the treatment of’ were identical. He did not see that the application related to more than one invention. On appeal, Judge Winograd ruled that one can have one application for a material, a second one for the method of fabrication and a third one for uses, provided each application is directed to patentable subject matter and there is no overlap between the cases. There Judge Winograd went on to rule that one application cannot include more than one patentable invention, i.e. one should not award more than one patent for one invention, and this is a corollary of Section 8 that a patent should cover one invention. One can file a plurality of applications for a plurality of related patents provided that each one is directed to a patentable invention and the claims are not identical or overlapping.

In the present case, both the parent IL 176831 and the divisional application IL 203972 have the title. In IL 203972 there is one independent claim. Claims 23 and 24 of the parent IL 176831 each depend on claim 1, and claims 25 and 26 are dependent on claims 24 and 23 respectively. The independent claim of IL 203972 is directed to using a powder to form a pill for treating a wide range of ailments. Claims 23 – 26 of the parent IL 176831 are directed to forming tablets and a corresponding process. The divisional relates to various states that are not in the parent application, but both cases have the same specification. According to the Applicant, the parameters are identical but the parent claims the process whereas the divisional application claims use of the active ingredient to prepare a pharmaceutical.

According to the Examiner, the divisional application claims use of a formulation for treating a disease, where the formulation is given in claims 23-26 and the diseases treated are listed in claims 1-22. In both cases, the formulation is the same, the particle size is the same and the active ingredients and additives are the same as those given in claims 23-26 of the parent. Novatis found the Welcome decision poorly claimed and poorly reasoned and could not see why two applications could not claim identical or overlapping inventions. They argued that where applicants are the same, there is no need to relate to identical or significantly overlapping claims, holding that the Israel Patent Law does not prevent multiple patenting. Novartis argued that Section 2 is merely a declarative statement that the applicant may file a patent. It does not have legal ramifications, and certainly does not limit the number of patents that the applicant may file. Section 2 does include the word “one” and it should not be read into the claim such that one patent may be requested for one invention. Support for this interpretation is found by contrast to Section 9 which relates to different applicants with patent applications for the same invention.

The parties are in agreement that different applicants cannot be awarded separate patents for the same invention. Novartis holds that the same applicant can be awarded two or more patents for the same invention. The Examiner disagrees.  Novartis accepts that there is no economical justification or logic in an applicant having more than one patent, and even sees this behavior as unacceptable. However, so long as there is some difference between the two patents, it is legitimate to award the protection of both patents.

The commissioner upheld the Examiner’s conclusion and ruled that so long as there is nothing in claim 1 of the divisional that exceeds the scope of the claims of the parent, there is no reason to allow the divisional.

COMMENTS

In the US, the issue of double patenting is dealt with by filing a terminal disclaimer. Although that prevents extending a term of protection (sometimes  disparagingly called evergreening), it still has negative ramifications. Third-parties such as an alleged infringer may have to show that he is not infringing a number of overlapping patents. Likewise, a competitor may have to show a number of similar patents are invalid or not infringed. This places an unnecessary burden on third-parties.


Israel Patent Office Closures Due to Snow

January 6, 2015

snow in Israel

Snow is expected.  Living at 940 m above sea level, we had over half a meter last year, with power cuts, water pipes frozen, etc. I must admit, therefore, that I am rather less excited and enthusiastic about this than my 12-year-old son.

The Israel Patent Office has announced that it will be closed on 7th and 8th January 2014. All deadlines are extended to the next working day.

They say that “It’s an ill wind that does nobody any good.”

The Israel Patent Office is closed on Friday and Saturday anyway. This means that Applicants with a patent, design or trademark deadline of 7th or 8th January can file on Sunday 11th January 2015.

This works for the Paris deadline for filing PCT applications as well, but it should be noted that the USPTO may have a problem with a national phase of a PCT application that claims priority from a US provisional application.

 

 

 


I love Sixty Seven Mark Challenged – Bond set at 3 1/2 % of that Requested

January 5, 2015

67

Chaim Gavriel and Daniel Milstein own Israel trademark No. 199199.  The mark in question is a word mark “I LOVE SIXTY SEVEN” and covers clothing, footwear, headgear; included in class 25.

Aymerich Inver, S.L. filed to have the mark canceled, and the mark owners requested that a bond of 200,000 Shekels be posted to cover legal fees in the event of the cancelation proceeding failing. The request was justified by noting that Aymerich is a limited company without assets in Israel, making collection of any award difficult. There is no way of knowing whether the company is on a sound financial footing. Aymerich responded by claiming that the company was financially sound, would have no difficulty in covering any costs awarded against it, and the mark holders had provided no evidence to the contrary.

Section 353a of the Company Law authorizes the courts to require that a bond is paid by foreign litigants and limited companies, and places the onus on the litigant to show that they have the financial resources. In 10905/07 Naot Oasis Hotels vs. Zisser, Judge Gronis (now head of the Supreme Court) explained that the underlining logic is to ensure that foreign litigants can’t file suit and then escape the consequences of losing. In Appeal 10376/07 L.N. Handasa vs. Bank HaPoalim, the three stages of determining liquidity in such cases is clarified. It is not enough to determine the financial state of the company, but also the chances of success in the litigation should be determined as should an appropriate bond in the specific circumstances.

Since the company filed suit in this case, the onus is on them to prove that they have sufficient finances to pay costs. The mere fact that there are no assets in Israel is insufficient to indicate a lack assets per se, but it is sufficient to indicate that the defendant, if successful, is unlikely to see their costs refunded. That is, after all, the logic behind requiring a bond from foreign plaintiffs.  That said, the bond should be related to the likelihood of success and to the expected costs in the event of failure. The Adjudicator of Intellectual Property, Ms Yaara Shoshani Caspi ruled that a bond of 7000 Shekels was appropriate in this instance.


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